How To Lose

I was thinking it would be interesting to discuss methods of losing at trading.

There's a theory that says if you lose consistently, then all you have to do is fade yourself and you'll then win consistently.

I'd like people to put forward ways of losing consistently that cannot be reversed. Partly it's a mental exercise but also it's to look at losing behaviours, which would benefit noobs.

Someone else want to go first?

thats equivalent of asking how to win consistently

Flip a coin for direction. Set stop at 5:1 ratio to take profit.

It doesn't take much to lose.

if thats the case, flip a coin, but bet the opposite, set stop at 5:1 ratio to takeprofit. so it would be it doesnt take much to win?

Not at all.

You can lose consistently by:
- moving your stops back out of the way to stop them from being hit
- setting unrealistic targets, ensuring the market comes back before you hit your targets
- doubling up to recoup losses on prior trades

A system that had these as components would lose yet it could not be 'reversed' to turn it into a winning system.

I have a feeling a lot of people lose money just because they don't realise the cost of trading regardless what system they use.

The thing I noticed early on was that a loss would always be the full 2% or whatever I risked but a win would reach say an equal 2% profit then pullback to say 1% profit and I'd take the 1% because I didn't want to lose the profit. I'd need 2 winners for every loser just to breakeven.

Trying to pick tops and going short, trying to pick bottoms and going long - BEFORE confirmation of the reversal.

Indeed - and the 'obvious' answer would be to let the trades run - but what happens when you make 1.99999% profit and it comes back and hits your stop?

The skill in that case would be to recognise when a trade is no longer going your way. That may mean cutting it when it's slightly profitable, slightly unprofitable. It might mean cutting trades before you reach your stop or target.

It's a tough nut to crack. Of course, you could always just let the trades run to the stop or target without interference...